TAIPEI, Taiwan -- Despite a significant drop in January sales, Taiwan's leading machine-tool makers including Goodway Machine Corp. and Awea Mechantronic Co. will inaugurate expansion plans earlier than scheduled.

Industry executives have pointed out that the recovering economies in the European Union, United States and China are inspiring Taiwan's machine tool heavyweights, including Goodway Machine, Awea Mechantronic, Tongtai Machine & Tool Co. and Shieh Yih Machinery Industry Co. , to start 2014 expansion plans.

According to the United Daily News, Goodway and Awea, both under the umbrella of the Goodway Group, have seen orders increasing month after month since last quarter, pushing up backlogged orders to over NT$900 million at Goodway and NT$1.2 billion at Awea.

The group will start to build a plant at the Chiayi Dapumei Intelligent Industrial Park in Southern Taiwan in mid-2014 as part of its plan to push into machine tools for aerospace and energy industries.

The initial phase of the project is scheduled to mass-produce in 2016, costing an estimated NT$1 billion in investment.

TWD Flux Expected to Stimulate Yearlong Performance

Tongtai will begin constructing a factory for around NT$600 million sometime in the second half of this year on 66,000 square meters it has leased at the Lujhu campus of the Southern Taiwan Science Park, with the plant to start volume production in 2015 and generate an estimated NT$4 billion in revenue a year at full capacity.

The company still has over NT$1.9 billion of backlogged orders, half from mainland Chinese carmakers.

It has orders throughout the first quarter and estimates visibility for new orders to continue into the second quarter, when the company estimates business will pick up markedly.

Kao Fong is constructing an NT$600 million factory on 6,791 square meters, with plans to complete the facility by the end of 2014 and start volume production in early 2015, to build heavy-duty double-column machining centers, five-axis machining centers and five-face machining centers to generate revenue up to NT$1 billion a year.

Shieh Yih plans to begin its third-phase capacity expansion for around NT$200 million in China on 9,900 square meters earlier than expected by the end of this year. The company still has over NT$1.4 billion of backlogged orders to keep production humming into the second quarter.

Regardless of the brisk orders to the island's machine-tool makers, Chairman of the Taiwan Machine Tool & Accessory Builders' Association (TMBA) Eric Chuo pointed out that the fluctuations of the New Taiwan dollar against the greenback will decide the fate of the island's machine-tool industry this year.

Despite tool exporters' large-scale expansion plans, Taiwan's machine tool exports fell in January, dragged down by worse-than-expected performance in China, Taiwan's major export destination, a local industry group said this week.

Taiwan's Machine Tool Exports Drop in January

Amid global economic uncertainty, exports of Taiwan's machine tools totaled US$247.49 million in January, down 21.9 percent from the previous month and 13.8 percent year-on-year, preliminary statistics indicate.

Carl Huang, secretary-general of the Taichung-based Taiwan Machine Tool and Accessory Builders' Association, attributed the drop to worse-than-expected exports to China, which account for some 25 percent of Taiwan's total exports, and represent a slide of 40.5 percent from US$101.28 million in December 2012 to US$60.23 million.

The Chinese New Year effect also played a role, dragging down the export figures, he told the Central News Agency (CNA).

Despite the poor performance in January, Huang still expressed optimism that the industry as a whole is “cautiously optimistic” for this year. Due to a low base period set in 2013, he said, the industry is expecting to see Taiwan's machine tool exports improve by 10 percent this year.

Some major companies are even more confident, setting export goals of 15-percent growth, CNA reported.